Japanese
model the latest styles of adult diapers in a 2008 Tokyo show organized
to raise awareness of the county's rapidly aging population. AP Photo/David Guttenfelder

Japan’s
rapidly aging population is producing some interesting new business
opportunities, including a booming market for adult diapers.

The Nikkei newspaper (subscription
only) reported on Thursday that three Japanese paper
companies—Daio, and Nippon Paper—are expanding their manufacturing
facilities for what are politely called “incontinence products” due to
an expected surge in demand. The Nikkei said adult diapers are expected
to outsell baby diapers in Japan by 2020, but according to Unicharm,
Japan’s biggest diaper maker, the tipping point was in 2011.

The
adult diaper market is growing at 6-10% a year, and already pulls in
140 billion yen ($1.4 billion) by catering to Japan’s elderly
population—it has the highest percentage of over-65s in the world,
making up more than 20% of the population.

Demographics aside,
adult diapers are an attractive business in their own right—they sell
for as much as 2.5 times more than infant diapers, resulting in higher
profit margins, and there’s also a lucrative sales channel to
institutions like hospitals and nursing homes. Marketing to consumers
can still be a minefield (as the parody ad from Saturday Night Live,
below, demonstrates) but diaper manufacturers—confident that the
embarrassment factor can be overcome—are determined to push the
envelope.

Sweden’s SCA, the world’s biggest hygiene product maker,
recently sent a sample of its adult diapers to every Swedish man over
the age of 55. It was besieged by angry phone calls from men who were perhaps not quite reconciled to needing the company’s products someday.